Pendleton Enterprises, Inc. v. Iams Co. (2024)

851 F. Supp. 1503

PENDLETON ENTERPRISES, INC., Plaintiff, v. The IAMS COMPANY, Paramount Distributors, Inc., Wholesale Pet Food and Supply, Inc., Defendants.

No. 93-C-786-S.

United States District Court, D. Utah, Central Division.

May 4, 1994.

William L. Crawford, Salt Lake City, UT, Stephen D. Colbert, Colbert, Colbert, Milor, Colbert & Bolles, Ardmore, OK, for plaintiff.

Patricia W. Christensen, Kimball, Parr, Waddoups, Brown & Gee, Salt Lake City, UT, D. Jeffrey Ireland, Donald E. Burton, Faruki, Gilliam & Ireland, Dayton, OH, Kent B. Linebaugh, Jardine, Linebaugh, Brown & Dunn, Salt Lake City, UT, Gregory B. Kanan, Alice Marie de Stigter, Rothgerber, Appel, Powers & Johnson, Denver, CO, for defendants.

ORDER GRANTING THE DEFENDANT THE IAMS COMPANY'S MOTION TO CHANGE VENUE TO THE SOUTHERN DISTRICT OF OHIO

SAM, District Judge.

This matter came before the court on motion of the defendant The Iams Company ("Iams") to transfer venue to the United States District Court for the Southern District of Ohio, Western Division. For reasons discussed more fully below, the motion is granted.

I. BACKGROUND

The plaintiff, Pendleton Enterprises, Inc. ("Pendleton"), is a former distributor of Iams' pet food and products in Salt Lake City and Denver. Pendleton brought this action against Iams and two other distributors of Iams' products, Paramount Distributors, Inc. ("Paramount") and Wholesale Pet Food and Supply, Inc. ("Wholesale"). The complaint has nine counts, alleging: (1) violation of § 2 of the Clayton Act; (2) violation of § 3 of the Clayton Act; (3) fraudulent misrepresentation and deceit; (4) conspiracy to refuse to deal with the plaintiff, in violation of § 1 of the Sherman Act; (5) tortious interference with prospective contractual relationships; (6) resale price maintenance, in violation of § 1 of the Sherman Act; (7) breach of an oral agreement; (8) violation of the Colorado Deceptive Trade Practices Act; and (9) a claim for declaratory judgment that Iams cannot collect on a trade account payable in the sum of $21,934.38 because the parties' contracts violate the Utah and Idaho Unfair Practices Acts.

Iams has moved, pursuant to 28 U.S.C. § 1404(a), to change venue of this action to the Southern District of Ohio, Western Division (Dayton), for the convenience of the parties and witnesses and in the interest of justice. Iams also points to a forum selection clause in the two distributorship agreements between Iams and Pendleton, which provides:

The parties further agree that any action, suit in equity, arbitration proceeding or judicial proceeding for the enforcement of this Agreement or any provision hereof shall be instituted in the State of Ohio, more particularly ... in the United States District Court, Southern District of Ohio, Western Division.

(Section 13 of Distributorship Agreements, Exs. 1 & 2 to Memorandum in Support of The Iams Company' Motion to Transfer Venue.)

Pendleton maintains that the forum selection clause does not apply because: (1) the clause is permissive, not mandatory; (2) the clause does not apply to statutory claims for antitrust and other violations, but only to actions to enforce the two distributorship agreements; and (3) the clause does not apply to the defendant Paramount, who was not a party to these distributorship agreements.

Pendleton's third argument is not convincing because Paramount does not object to Iams' motion to change venue. (The other defendant, Wholesale, has been dismissed from the suit.) The first two arguments are discussed below.

II. DISCUSSION

A motion to change venue under § 1404(a) "calls on the district court to weigh in the balance a number of case-specific factors." Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 2244, 101 L.Ed.2d 22 (1988). "The presence of a forum-selection clause ... will be a significant factor that figures centrally in the district court's calculus." Id. (emphasis added). Indeed, "the venue mandated by a choice of forum clause rarely will be outweighed by other 1404(a) factors." In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir.1989).

A. Whether the forum selection clause is mandatory or permissive

A number of courts have held that where a forum selection clause only specifies jurisdiction, without further limiting language to indicate the parties' intent to make that jurisdiction exclusive, the clause is not mandatory. E.g., Hunt Wesson Foods, Inc. v. Supreme Oil Co., 817 F.2d 75 (9th Cir.1987) ("courts of California, county of Orange, shall have jurisdiction over the parties in any action at law relating to the subject matter or the interpretation of this contract" held permissive); Citro Florida, Inc. v. Citrovale, SA, 760 F.2d 1231 (11th Cir.1985) ("Place of jurisdiction is Sao Paulo/Brazil" held permissive); Caldas & Sons, Inc. v. Willingham, 791 F.Supp. 614 (N.D.Miss.1992) ("The laws and courts of Zurich are applicable" held permissive).

On the other hand, where the clause refers to venue, specification of a forum is sufficient to make the clause mandatory. Milk `n' More v. Beavert, 963 F.2d 1342, 1345-45 (10th Cir.1992) ("venue shall be proper under this agreement in Johnson County, Kansas" held mandatory); Full-Sight Contact Lens Corp. v. Soft Lenses, Inc., 466 F.Supp. 71 (S.D.N.Y.1978) ("any suit brought by Distributor shall be brought in either San Diego or Los Angeles County" held mandatory). Cf. Utah Pizza Serv., Inc. v. Heigel, 784 F.Supp. 835, 838 (D.Utah 1992) ("Franchise Owner stipulates that the courts of the State of Michigan shall have personal jurisdiction over its person, that it shall submit to such personal jurisdiction, and that venue is proper in Michigan" held permissive and ambiguous).

The clause in these two distributorship agreements specifies a forum for venue ("any action ... shall be instituted in the State of Ohio, more particularly ... in the United States District Court, Southern District of Ohio, Western Division") and is therefore mandatory.

B. Scope of the forum selection clause

The forum selection clause does not apply to all claims between the parties, but it does apply to "any action ... for the enforcement of this distributorship Agreement or any provision hereof" (emphasis added). The clause does not necessarily apply to statutory antitrust or unfair practices claims; however, Pendleton also raises several contract or quasi-contractual claims.

Count seven alleges breach of an oral agreement "to enter into consecutive one year contracts as long as Pendleton made certain capital expenditures and met IAMS sales requirements." (Complaint at 12.) The complaint does not indicate when this oral agreement was made, but such an oral agreement appears to violate the following provisions in the distributorship agreements:

This Agreement together with the Company's standard terms and conditions of sale represent the entire Agreement between the parties ...

(§ 13, Distributorship Agreements).

THIS AGREEMENT SUPERSEDES ALL PRIOR, EXISTING, AND CONTEMPORANEOUS AGREEMENTS, WHETHER WRITTEN OR ORAL, BETWEEN THE PARTIES HERETO RELATING TO THE DISTRIBUTION OR SALE OF THE COMPANY'S PRODUCTS.

(§ 16, Id.).

Where enforcement of a provision of the distributorship agreements is clearly a defense to a claim, that claim should be considered to fall within the scope of a forum-selection clause that applies to any action to enforce the provisions of the agreements. Otherwise, the intent of the clause might be defeated simply by winning a race to court.

Count...

Pendleton Enterprises, Inc. v. Iams Co. (2024)
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